Opinion
(August Term, 1851.)
1. Where a mortgagee, or one for the security of whose debt or responsibilities, a deed of trust is given, dies, his personal representative is an indispensable party to a bill for the foreclosure of the mortgage, or the execution of the trust.
2. The principle of equity in respect to parties, is, that all persons interested in the subject of a suit, ought to be before the Court, so as to be concluded by the adjudication, and thus will be avoided the vexation and expense of further litigation of the same matter, by an omitted party in interest.
3. On a demurrer to a bill, a defendant is not confined to the causes of demurrer assigned in it, but may insist ore tenus on others.
APPEAL from the Court of Equity of Burke, Fall Term, 1850, Dick, J., presiding.
Gaither for the plaintiffs. (262)
Bynum and Avery for the defendants.
The bill was filed in April, 1850, against Alexander Duckworth and his wife, Nancy, and it states that the defendant, Alexander, was indebted to Charles McDowell, as the guardian of an infant, in the sum of $767, and, to secure the same, that he, and John Vanhorn, as his surety, executed their bond therefor to McDowell, as guardian, on 18 April, 1843; and that, in order to indemnify Vanhorn, and save him harmless, Duckworth, at the same time, conveyed to Vanhorn in fee, a house and two lots in Morganton, in trust, in case Vanhorn should be in danger of being compelled to pay the debt, to sell the premises for ready money, and therewith discharge the principal and interest that might be then due on their bond: That the premises were, at that time, a sufficient security for the debt; but that no part of the principal or interest hath been paid, as the plaintiffs believe, and the debt has thus been allowed to accumulate, until the amount probably exceeds the value of the premises conveyed to Vanhorn, by way of counter-security, which have been, and are in the possession and enjoyment of the defendant, Alexander, and are becoming dilapidated; and that he, Duckworth, has but little other property, and is embarrassed by other debts, to a greater amount than the value thereof: that Vanhorn died in January, 1848, and that the plaintiffs and the defendant, Nancy, are his children and heirs at law: That, after such long forbearance, the defendant, Alexander, cannot reasonably expect more, but ought to pay the debt in exoneration of Vanhorn's estate, or that he and his wife ought to unite in a sale of the premises, which they refuse to do. The prayer is, that the defendant, Alexander, be compelled to discover what sum is due to McDowell, and that the sum be ascertained, (263) and that a sale of the premises may be made under the direction of the Court, and the proceeds applied, as far as necessary, to the payment of the sum that may be found due.
The defendant put in a demurrer, because McDowell was not made a party; which, on argument was overruled; and the defendants were allowed to appeal.
The Court considers the decree to be erroneous. The defendants are not confined to the cause of demurrer assigned in it, but may insist, ore tenus, on others. Without saying definitely, whether McDowell be a necessary, as well as a proper party, the opinion of the Court is clear, that the personal representative of Vanhorn is an indispensable party. The principle of equity in respect to parties is, that all persons interested in the subject of a suit ought to be before the Court, so as to be concluded by the adjudication, and, thus avoid the vexation and expense of future litigation of the same matter by an omitted party in interest. This principle clearly embraces the personal representative of Vanhorn, as the personal estate might be damnified, and is primarily liable on the obligation of Vanhorn, as it appears upon the statement in the bill; and, therefore, the personal representative would have a right to call for an application of the proceeds of the conveyed premises to his indemnity. This would be true, if the bill were quia timet, to prevent loss to the plaintiffs, as heirs at law of their father, or some of them, since the personal estate would likewise be liable for the debt, and, indeed, primarily so, as between it and the realty. But the case of the plaintiffs, as made in the bill, is not even as strong as that; for, it is not stated that the ancestor left any real estate to descend to his heirs, excepting only the mortgaged premises. Hence, the plaintiffs are in no possible danger of loss out of their own property — that is, out of property which is theirs in the view of this Court. The bill is filed by them merely in the character (264) of part of the heirs, upon whom, on the death of the mortgagee, the mortgaged premises descended, and their only interest is that of some of the trustees in trust for the debtor, and the personal representative of the surety, and, upon the equity of substitution, for the creditor. If a bill by some of the trustees against the others, to compel the latter to join in a sale, will lie, at all, without request from the debtor, the representative of the surety, or the creditor — they not appearing to be under incapacity — it seems certain, that it will not, without the estate of the surety, at least, being represented. For, although trustees may proceed to sell, under a power of trust to that end, without applying to the Court to have the debt ascertained, yet the Court will not, at the instance of part of them, more than at that of the creditor, or other person claiming a benefit under the deed, decree a sale and require the other trustees to join in it, without its being established, that there is a debt, and what the amount of it is. The Court may not restrain trustees from selling upon their responsibility; but, at the same time, the Court cannot be active in compelling them to sell, without first being satisfied, that there ought to be a sale, and to what extent it should be made. That depends on the enquiry, whether there is a debt, and what it is. This bill admits that, by asking for an account from the defendant, Alexander, and praying that the debt may be ascertained. But, in order to an enquiry on that point, and to render its result conclusive, so as to protest the present parties, it is at least necessary that the cestui que trust — that is, the surety, or the representative of his estate, should be heard on the enquiry. Perhaps McDowell, the creditor, may be a necessary party, since he might indirectly derive a benefit under the deed. But that need not be considered now, since the surety, for whose indemnity it was the direct purpose and effect of the deed to provide, ought to be represented in this suit, in order to prevent these parties from being exposed to a future suit by the personal representative, for the same matter. The (265) decree is erroneous, and should be reversed, and a decree made, sustaining the demurrer, and dismissing the bill with costs. The plaintiffs must pay the costs in this Court.
PER CURIAM. Reversed.